HFF Facilitates Sale of San Diego Property

By Barbra Murray, Contributing Editor

Fifty Twenty-Five, a student housing property in San Diego, has come under new ownership, and HFF played no small part in the deal. The provider of commercial real estate and capital markets services facilitated the sale of the premier 942-bed asset to FPA Multi-Family L.L.C. in a $69.5 million transaction.

Everyone wants a piece of the student housing market. “We saw quite a few new, qualified entrants into the space, competing aggressively for this opportunity,” Hunter Combs, director with HFF, told Commercial Property Executive. Combs and fellow HFF Director Zack Holderman spearheaded the marketing of the property on behalf of an undisclosed seller.

Fifty Twenty-Five sits at 5025 Collwood Blvd., less than one mile from San Diego State University, where the student population numbers approximately 30,000. Developed in 2010, the 260-unit community hit the market unencumbered and found an eager audience. The property attracted local, regional and national investors. Ultimately, HFF received 6 offers.

“On this transaction specifically, we saw a diverse buyer group, a mixture of student housing specific and market-rate buyers looking for a sizeable footprint in San Diego.  We didn’t expect this initially,” Combs said. “Many market-rate apartment investors are being priced out of the market and in this case, those investors were attracted to the product, location and ability to achieve greater returns, than typically seen on market- rate apartment sales.”

Fifty Twenty-Five is LEED Gold-certified and features all of the amenities that students expect, if not demand, in off-campus housing these days: flat-screens, modern furnishings, loaded kitchens, tanning beds and the like. According to a report by J Turner Research, a full amenities package is high on student residents’ list of priorities and, when delivered by the developer, they’re willing to pay a premium for their amenity and design preferences.

Nationally, the student housing sector continues to thrive, and investors can’t seem to get enough. “Demand in supply-constrained, top-tier costal markets remains high for both student and market-rate apartments.  In San Diego, with all of the growth seen at SDSU, as well as surrounding community colleges, combined with very little new supply coming online, interest remains extremely high,” Combs noted.